Making Money from Ebooks
After all the complaints that ebooks are going to be the death of the publishing industry it’s nice to hear a story of success, even if it’s not one most publishers want to read about. That’s what I thought when I stumbled across the story of Amanda Hocking, a self-published author who sells her ebooks via Amazon’s Kindle store and who is estimated to have made $2 million over the last 12 months (how it happened in her own words). A publisher has (apparently, privately) stated that there is no traditional publisher in the world who could offer her a better deal than she’s receiving right now on the Kindle store. Having said that, Hocking has recently signed a $2 million four-book deal with traditional publisher St. Martin’s Press for a new series, the reason:
“I want to be a writer,” she said. “I do not want to spend 40 hours a week handling e-mails, formatting covers, finding editors, etc. Right now, being me is a full-time corporation.”
Hocking is certainly not alone in this either, looking at the Kindle sales chart quite a few authors sell more than enough volume to earn a living while only making $1-2 (or less) a copy. What’s interesting is the pricing. Hocking’s books retailed for either 99 cents or $2.99, with Amazon taking a 30% cut. That price point is important. At that figure people are prepared to gamble on an unknown and you open yourself up to impulse buys.
So does that mean that if you want to make money as a writer, just self-publish at the right price point? Well, no. The number of people making a living from self-published books, electronic or otherwise, is tiny, as are the number of traditional authors who make a living (though a larger number I suspect). Hocking writes ‘paranormal romance’ (think Twilight), which is a popular area read by a lot of people, one that has a strong appetite, which means they will try new authors to fill it as no one writes fast enough to keep up with consumption. Add this to the price point, and a lot of self-promotion and you start to see why Hocking’s books were a success (Hocking was certainly aware of writing for a market, see her describe her success on video).
Hocking has also proved that publishers still have a place. One reason is to help do the things writers don’t want to (editing, formatting, distributing, promoting), another is to help authors reach a wider audience (the market for physical books is still much larger than ebooks and publishers networks are therefore invaluable). What it also proves is that writers have an alternate route to publishing and that publishers have a way to pick up authors who can prove their track record, rather than taking a gamble on an unknown. It could also be a cheap testing ground.
Some traditionally published authors have gone the other way though, and ebooks are proving a good way to offer an author’s back catalogue (the so-called long tail). It should mean no author need ever be out-of-print again. It also shows the power of a platform, like Amazon, to allow people direct access to a market (something that is working in other markets too). Equally it highlights the need for people to be able to discover you and the power of promotion, services I think will start to grow as a separate industry and which traditional publishers may take a lead in.
Rather than be afraid of ebooks and self-publishing, I think they offer great opportunities to publishers if they learn how to embrace them. I don’t think there will be a ‘best way’ to use ebooks, but they certainly signal a shake-up for writers and publishers and I don’t think that’s a bad thing.